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The Japanese Mobile Market

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What’s different about the Japanese mobile market is that innovation is moving toward business models and marketing tactics instead of technical features and functions.

"The explosion of non-official mobile content Web sites is causing the sun to set on the i-mode business model of a dominant mobile carrier selling incremental content and services to its user base," says John du Pre Gauntt, eMarketer senior analyst and the author of the new Japan Wireless: Marketing to a Mobile Society report. "Flat-rate pricing for 3G services and a broadening of the scope of industries with a strong interest in mobile services means that mobile marketing and advertising has become all the more important in Japan."

Japan’s Ministry of Internal Affairs and Communications (MIC), says that the number of mobile subscribers has been slowly increasing over the past year. In February 2007, Japan surpassed the 100 million mark for mobile subscribers. This means that the majority of the country has access to wireless services and only small segments of the population are not served by mobile services.

According to MIC figures, the number of 3G subscribers for all carriers now is over 60 million. With full penetration of mobile, wireless accounts for much of the Internet-based activity of the Japanese public.

eMarketer estimates that approximately 70 percent of the Japanese population, or 89 million people, is connected to the Internet. Out of that Internet population, mobile was slightly more preferred than the PC.

"Japan’s situation is well advanced compared with mobile markets in North America and many parts of Europe, where the primary value proposition seems to revolve around a singular technical niche, such as the music phone, TV phone or e-mail phone," says Mr. Gauntt. "Yet all major advanced markets seem to be converging toward a kind of maturity beyond novelty features."

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The Japanese Mobile Market
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  • Anonymous

    Thanks, Mike, for an un-analyzed repub of eMarketer’s similarly un-analytical and uninformed review of mobile in Japan. Yes, the classic ‘digital content for sale and the carrier rakes a 9% fee for running the portal’ business model is not as pervasive as it once was. One reason is that the official i-mode portal is bursting at the seems with something like 6,000-plus sites – it’s getting excruciatingly difficult to go to DoCoMo with a content idea that hasn’t been done already. So, yes, providers have more luck selling off-portal and that’s where almost 90,000 sites (Wireless Watch Japan estimates) are thriving. Another reason is that due to continuing business model and technology innovation by all the Jpn carriers, services and features on Japanese 3G mobiles are far more sophisticated – and far beyond – the mere delivery of ring tones and images, plus a bit of music. DoCoMo’s DCMX mobile credit-card platform (it truly is a platform – any consumer-facing entity can sign up to offer their own branded CC services via the phone) is gaining serious traction and had almost 1 mn users as of end-2006 (after launch in April 2006) – all due to the mating of a cash- and ID-bearing IC chip onto the handsets.

    eMarketer also glaringly failed to highlight the fact that DoCoMo, and the other carriers with other ad agencies, joined forces with Dentsu to launch D2C in June 2000 as a mobile marketing agency in order to develop (and profit from) the planned-for-and-expected ad-driven non-official mobile site galaxy. D2C claims to have served nearly 2 bn graphic banner ads since their ‘picture service’ launched in July of that same year. Why? Because mobile email in Japan includes clickable links (unlike the much over-hyped SMS services elsewhere). Whose idea was it? The carrier’s…

    The fact is, the post-3G era in Japan continues to deliver fantastic mobile services at affordable prices because of carrier-led business-model and technology innovation.

    It’s at least somewhat naive to suggest the sun is setting on i-mode or indeed that innovation in the mobile industry in Japan is shifting towards business and marketing models as opposed to technical features and functions enabled and led by the carriers.

    • Anonymous

      These comments are based, by the way, on a similar rebuttal that we’re preparing for WWJ (Wireless Watch Japan). — Daniel Scuka (daniel [{at}] wireless watch [dot] jp)

  • Anonymous

    Hello Mike:

    Wireless Watch Japan has been covering the business of mobile from Tokyo, in English, for over 5-years now. We have posted our respond to this eMarketer report on the top page at: http://www.wirelesswatch.jp

    best regards,

    Lars

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